When a US client engages a pharma or IT consultant through Vakula Tech, one of the first questions is the employment model. Three are common, and each carries different obligations.
W2 contract
The consultant is engaged as a W2 employee for the assignment, with employment compliance handled by the employer of record under the engagement agreement. Clients get the simplest compliance position and a single invoice. Consultants get predictable pay and, depending on the assignment, benefits. This is the default for most onsite and long-term roles.
Corp-to-corp (C2C)
The consultant operates through their own corporation or LLC, and Vakula contracts with that entity. Suitable for experienced independent consultants who already run a business. The consultant's entity handles its own taxes and insurance; we verify the entity, its insurance certificates and, where relevant, work authorisation. Some client MSAs restrict or prohibit C2C, so we confirm before submission.
1099 independent contractor
Used sparingly. The IRS and state tests for independent contractor status look at control over the work, not the label on the contract. A consultant working set hours at a client site under client direction is rarely a defensible 1099. Where the work is genuinely project-based and independent, 1099 can fit.
How we decide
- What the client's MSA and MSP programme allow.
- The nature of the work: direction, hours, location, duration.
- The consultant's existing business structure and preference.
- Work authorisation and any immigration constraints.
We set the model and the rate out in writing before any interview so nobody is surprised at offer stage. Consultants can send a resume; clients can start with one requisition.